the small business owners could jump-start the local level. >> your not invited. >> i like this one. obama was serious for mitt romney? and neil cavuto for food. >> county and. gerri: hello, everybody. i'm gerri willis. tonight, an in-depth look at housing, the state of the market and the opportunities that await , fires and investors. as you no doubt remember, on a rocky road after a bull market in which prices topped out in july 2005, median home values plummed 32%. and some owners saw their prices cut in half. the worst is over.

median prices o 16%. home sales just hit a four year high. inventories are at their lowest lel since 2006. foreclosures are declining. it has been a long, hard road for many families to consider their home their bigst investment, and 31 percent of us still owing more than our home is worth, you may be wondering how we can possibly see a silver ng in the housing market. you want more evidence? phoenix arizona, a market that was the poster child for housing problems. the overbuilt domination leading foreclosure, entire neighborhoods abandoned and in disrepair. today prices are up 25% so far, and track to finish up 30%. to be sure that is not as big again as the decline, but the city is poisedfor real recovery the same story of recovery is playing out in miami, san francisco, sanjose, seattle. big loseers staging convincing turnaround. i ink this may be the most important story of the year, and

not when you're likely to hear much about. the media likes to avoid good newsheadlines. the headline, if it were written, would be, housing is the best opportunity for americans with ready cash. a strng recovery, lower interest rates, low prices. how you can make ut like a bandit. that's a right to it. all-star panel. and michael lawson, research and will -- analyst. welcome all. we will art with you. what do you make of this market -- market? bumping along the bottom? what is goi on to mac. >> beyond. this recovery is for real, and that think it's going to surpri on the upside with its vigor.

there are all the signs of positive. ventories are down to six months. housing prices are up in all metropolitan areas, and the best thing is that supply is receding. pent-up demand is coming back. gerri: i like the sound of that. but you make some interesting points. you say is recovery could be more anemic than we expect because 27 percent of the buyers are investors. those the kinds of folks you weakness.oad at any sign of help us understand your point. michael. michael, are you there? can you hear me? all right. we may hav lost my cool. he will check. in the meantime, let's get to robert. you have som interesting comments in your pre interview. he said that the recovery as really been sluggish for home builders. how so? we hear that there is a lot of upbeat attitude among home builders, and receive stock

prices that are on fire. >> builder confidence is definitely up. in h-p, measure a builder coidence has been of the last six months, but housing starts, housing construction fell so much in the crisis years that is still has a lot of room to grow. some housing construction starts at about 870,000. 70 percent off of the bottom of the market. it's only about halfway to a normal market. gerri: a long way to go. that is why we're doing this special tonight. you don't want to wait until pres are at their highs to buy. let me get back to mike for oe second. just try to bring u.n., having a little trouble with your isp. at think we have you now. the interesting thing you said in your pre interview struck me. this recovery could be weak because some many of the buyers are investors. explain? >> sure. we have to be concerned about the risk of what i call an echo bubble. we have a very high percentage investors that are buying back into the market now simply because it is next to impossible

to generate income from anything else. treasury doesn't pay anythg, bank accounts don't pay anything. investors are buying higher-yielding things like junk bonds to an even residential real estate property. we now have an investor market share about 27 percent of buyers according to he national association of realtors. really tight as been higher than that was in 2005 when it was 28 percent, and we all know wt happened afterward. it is a chance to keep an eye on. it is a chance to keep an eye on. gerri: the stock and some of the things that could bring the market down that we might not be expecting. facing a fiscal cliff. a very big issue. one of the things that might come about of washington is maybe what we do is take away the mortgage deduction. is that a threat to the market? >> suddenly the iscal cliff is the number one threat to the market. forget to recession, we are back into housing market crisis, no doubt about it by the way, if weon't sole the fiscal problems goin forward, we have an interest ras by kenaf future.

so out. gerri: we cannot win for trying. >> exactly 56 can't win either way. other people talk about the possibility of another recession . i guess you could call it a double dip. it does not feel like we ever t out of thelast. do you see receson as a bi threat to the housing market? >> not if that this booklet is handled proprly. if we have a huge set of government spending cuts and tax increases, certainly a recession would be a problem for the housing market. on the other hand to mouth we have to be careful not to trade one set of tax hikes for another. you mentioned mortgage interest reduction. a huge mistake to limit the mortgage interest deduction upon when the housing mket is providg growth for gdp. gerri: but it could happen. what would be the impact if the mortgage deduction were taken away, say, for everyboy. what happened to the housing market? >> iit were taken away would have a huge impact on anyone that has to buy out the mortga. gerri: how much with the mark to the housing g market cut down.

and looking for facts and figures. the mark down 30%, 15, o would it have any impact at all? >> it would have a huge impact on prices, 6% and 15%. you can pick your estimate, but an enormous impact on hous of wealth. everyonedecline in house prices, 160 billion of household wealth. it would take a 6% to 8. gerri: i feel like we have not so much of already. to you. we talk of a lot about recovery, what could happen, what might forestall it. the elephant in the room is 31 percent of americans who are under water on their mortgage, no more than their house is worth, probably cannot get refinanced, sadly may not be buying additional real-estate. what would you say to those people? what would be aired next up? >> well, you look at where we are with mortgage rates cannot talk about a 30-year fixed lon. essentially an all-time record low, but only for people in a position to buy. they have the down payment

money, equity in there current home a can leverage at into the new property, or they're paying cash and emigre credit score. allow the people don't fit the bill simply because of the overhang we have from the housing bust. for those people i think he may have to be a little bit more patient. we're seeing home prices are to appreciate. the pace is modest. see percent nationally. certainly not what we get used to in the mid 2000's. it's going to take some time. gerri: the real wor question that i get asked all the time. they tell me, i'm never going to buy real estate again. i got stung, burned, i don't believe in it. the housing market is never coming back, certainly not tasty does the six levels. what would you taste -- itizen the right that? >> they certainly should not have been buying for the sake of the gains that many were assuming or in the bag and could not help. on the other hand, at this point in time, if you need ten own or

rent, according is, depending on the market to more affordable than renting, and by the lake, killing up. gerri: that is a good point. to you. yore looking at the housing market every day. new houses, the pace and pattern of construction imprroving, picking up. will it become the nexus for a broader economic recovery jack really see housing picking up by before there is a really big boom i economic times. what is in your crystal ball? >> as we see an increase in housing, we know every house increased three -- jobs, the potential to help economic growth and has been 20% of economic growth in 2012. so as housing continues to build up, it's going to help the economy. inventories are low. we're ready to occupy and on construction, 40,000 units right now, so a lot of potential for growth. gerri: last word. as you look at into the next test of months, what do you see

in your crystal ball? >> again, as long as we avoid a serious fisc cliff type crisis , we avoid a spike in interest rates, some of those challenges. i think housing continue to gradually recover with the caveat that we want to keep an eye on the investor activity. too much money pouring into the market, we know that ultimately results in people pulling at money back out when conditions hour whih is definitely a chance to keep an eye and. gerri: we will be telling people how to use that hot money and how to invest in housing. susan, robert, michael, thank yofor coming in. fascinating conversation, great to hear all of your ideas and thoughts. thank you. and if you are fired up about this or have a house in question, wre me an e-mail. gerri@fousiness.com. >> coming up on a special edition of "the willis report", americans are getting a better handle on their mortgage these days, but home buying is still secure than ever. the will of the find the best bang for your buck next.

should you buy a foreclosed on? it can be a great deal from buyers, but first, and other potential pitfalls. our housing expert is here to explain. and now the perfect time to buy that vacation homef your dreams. tipsou don't want to miss later. also, the new craze, flooding homes. is it a good idea right now? the property ladder host tells us what you need to know as our housing specal continues. we are on the case next on "the willis report." all eyes, right here. this is our year. i thought it was la year... turns out i was wrong. none of us would walk in here and settl that's how we are! i forgot what i was going to say. patrick, i want 100% commitment! because i care man, ok? who are we!? 49ers! 49ers! 49ers! yeah! [ all cheering ]

what the heck is going on in here? sorry coach, i just got a ttle carried away. alright, i think we're good. [ morgan ] for a chance to ben a lock room on game day and more... join visa nfl fan offers and make your season epic. now is a good time to think about your options. are you looking for a plan thateally meets your needs and your budget? as you probably know, medicare only covers abo 80% of your part b medical expenses. the re is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, they cover some of what medicare doesn't pay. and could save y in out-of-pocket medical costs. call today to request a free decision guide to help you better understand medire and which aarp medicare supplement plan

works best for you. with this type of plan, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and you'll never need a referral to see a specialist. there's a range of plans to choose from, too. and they all travel with you. anywhere in the country. join the millions who have already enrolled in the only medicare supplement plans endorsed by aarp, an organization serving the needs of people 50 and over for gerations... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. call today. remember, all medicare supplement plans help cover some of what medicare doesn't pay -- expenses that could really add up. ese kinds of plans could save you in out-of-pocket medical costs. you'll be able to choose any doctor who accepts medicare patients. and you never need referrals.

if you're thinking about your options, call today. when you call, request your free decision guide. and find the aarp medicare supplement plan that may be right for you. ♪ gerri: welcome to our "the willis report" special on the housing market. buying a new home cn be a very long, complicad process, but it does not have to be. the tru is, with mortgage rates at record lows, there are lots of opportunities for home buyers. can yoget financing? vice-president joins me now. i w just looking at that.

that is really a -- attractive. there are people that i know, their first house was financed with 11 percent loan or 12% of. >> the early 80's. 808581. gerri: how meaningful is this the people who are shopping. >> of borrowing from money. there will never be a time in history where you will be able to borrow as low as you can right now. it is uly an impressive time to be able to jump into the housing market. gerri: that is the opportunity. really low mortgage rates. a great deal. but, can you qualify? the standards and that lenders are imposing, tougher than you might have seen for five years ago. tell me how difficult it is to get the really great non. >> the key is preparation. different than it was for five yearsgo. back then but you had to document, what you had to show the bank was very little. gerri: does much paperwork and analysis much. >> correct. now you have to do your diligence, verify improve your income, which was different for

five years ago. gerri: things that and bankers are asking for, i can't get over it. really. i mean, the details, the minutia , proving it beyond a shadow of a doubt, some of this d come that i think, well, even a couple of years ago you were not district. what has happened in the marketplace? >> it is all about the buyback. no bank wants to all something that they cannot sell the they cannot sell-off to fannie mae or freddie mac for fha. they want to be a "loaded, even if they don't have plans to do so, they want to have the security in knowing that they could. to do such you need to deal to provide the package set the secondary market is looking for, so you talked about the minutia. the estimate is, but if you try to make loans, you need to be able to doub your eyes atrocities and everything. gerri: give me a tip on this. big, big, national banking community bank. >> it's more about a lot of this you're going with. the key is having someone accountable, but in doing what theye ding.

gerri: had no? >> elective for someone who will be referred to you. confined of a local realtor who then recommend, an attorney. go into a ocal bank to do it like an interview. gerri: the key question to ask if average of your solyndra? know that they're going to be on my side. >> you want to speak to the pt clients parisi what they have done. had they been there or five months are have they been the for five years? that is a key. gerri: everyone talks about the 30-year fixed-rate. but probably still people who want adjustable-rate mortgages, maybe they know for certain there will only be in the house for certain time. maybe people want interest on loans. what is available at the today? the whole range of product or our banks to scared of regulators to offer these products? >> everything for the most part is still out there. you have your fixed-rate

mortgages, adjustable rate that range from ten years with and about just all-time. also have interest only. traditionally, 3-year fixes such a grid now, the enicent to take that is greater than may be taking a 51 arm thrust a lower interest-rate knowing that in your six are seven hat could matu and will go up six 1/7 years from now when you could have that 34%. gerri: it's going to go up. it can go away at. if we have a big recery, i think you're looking at inflation, you're looking at higher interest rates. spking of that, though, who gets that? is everybody offered that? >> the world gets close. traditionally it's assuming a couple of factors, somebody putting 25 percent down, assuming having credit scores of 740. there are a couple of factors and that they're going to drive that rate. but it'always going to come in

putting 20 percent don. a credit score of 680. amen and get 34, they get 35. it'sgoing to be close, and if you look back, it's still very impressive. gerri: very impressive. thank you for coming on. appreciated. well, still to come, now that you have the money, what should you look for when you by the house? we will ask to of the nation's hottest religious. next, should you be bying a foreclosure? how is it different than buying a regular house and where should you be looking? answers at the break. for many, nexium helps relieve

heartburn symptoms caused by acid reflux disease. osteoporosis-related bone fractures and low magnesium levels have been seen with nexium. possible side effects include headache, diarrhea, and abdominal pain. other serious stomach conditions may still exist. talk to your doctor about neum. ♪ gerri: some of the best deals and housing. important new details on

gerri: knocking tens of thousands of dollars, maybe more, of the price of your nextel's sounds appealg. a slew of foreclosed homes up for grabs that offers huge discounts. with more on where to ind them and how to do it, executive vice presidents. always great to see you and have you on the show. thank you for coming in. here is what i want to know. foreclosure dealsdwindling. september buyers got a 7% discount. that is down from 9% last year. mit late? have i missed it? >> there are still bargains to be had every tour acrosshe country. and the discount numbers are relative. you're still going to find properties in a given market that have considerably higher

discounts. i think the folksprobably among the most conservative in determining foreclosure discounts. so a lot of opportunity people looking for discount properties. gerri: this talk about the kinds of things you are thinking about you say star with sale price. hata analyze that? >> what you want to take a look at is your average cost per square foot. certaanly take a look at comparable properties in the area. for a lot of people that means working with a local realtor who can work through the market and show other properties that are re traditional, show them what other forces those reprises sold for. gerri: property condition is important, and a lot of people in the spending more on the house than they wanted because the property is not as in good a condition is the thought. hata make sure i am buying a house that a solid? >> love the benefits to buying a house that has been foreclosed on is you have a chance to

inspect it. we often encourage people to walk to the roperty this summer you can give them a working estimate of what it's going to cost to repair property and bring it up to liveable conditions. as one of th biggest decisions people mae. the overestimate he value and underestimate dramatically how much it will cost to fix the property of the way they wld like it. gerri: what we saw in the market, the worst oftimes, homeowners would get angry they were leaving, damage to property and maybe in ways that you never expected and a difficult to find until you actually take possession. potential legal issues out there. >> there are potential legal issues. we have seen incidents where people have purchased forecsed properties only to find out that the foreclosing entity did not actually have the right to foreclose. issues with paper work that had not followed the transtion to the history of the property, so you need to make sure that you have a clear title on the property, the title insurance,

again, do that kind of diligence because for most of us it is of very important financial investments we're maki in our place to live. gerri: market trend, ocation. w analyze this? it can be disconcerting. >> we really strongly recommend that any fst-time home buyer, anydy w is buying a foreclosure for the first time a particular work with an experienced realtor who thinks they can be taken through the paces. you want to look at things like school districts, things like crime trends, property values have stopped faing, which they have been a lot of markets we are starting to see prices come back. as a the kind of things you want to take a look get beyond just what the sale price of the property is. gerri: price can beimportant. other people make a deciision on that factor alone. is the price low enough. you could use a very bad market. take a lead detroit, really down on its ear, a tough place to buy housing.

cheap, but do you really want to buy there? how do i decide whether low is too low. >> i was on a panel with a banker at properties in detroit and the offer to pay me $500 a ton to one of his hands. i think he was getting. but what you really want to look at, if you are a home buyer looking for a place to live, look around the neighborhood and ask yourself, is this prlem of family to be. if you're an investor looking for property, look round and get an idea of what rental rtes are, occupancy, is this a place that will require a lot of matenance and care? again, foreclosures can represent a really good value, a really good deal, but you need to be an educated buyer, do your homewo. gerri: one final quetion. we have been talking a lot about the fiscal cliff, and i think it is critically importanfor anyone in the housing market right now. you could see higher taxes, change the way you think a lot investing. you could find out that yu are

really on the hook for more money. what are you telling peoe about that issue? >> you know, there are certain things we can control and ceain things that we can't. the government could make some -- the government to mke some disastrous decisions for the real-estate market like letting the -- letting expire the debt forgiveness act. mortgage tax deductis all sorts ofhings go wrong. would you care right now is, c you afford to buy property safely, are ouin a rlatively stable job? affordability levels are still at historically good numbers. is really a gd time to be on the market if you can get the financing. you ho that sanr heads prevail and we don't go off the fiscal cliff. gerri: if you're looking for opportunity in the housing market, righ now is it. thanks. appreciate your time. thank you. >> my pleasure. gerri: is now the best time to buy that second home, the dream

vacation? next and joined by two of the hottest three letters in the country. what you need to know when putting your home on the market. advice on buying and selling next.

gerri: welcome back to a special edition of "the willis report." rebuilding the american dream. ting to the bottom of the most pressing issues facing americans in the housing market like trying to buy or sell your property. expert panel of three -- vehicles turning me now. thfounder and ceo in seattle. and co-founder of the alexander group. welcome to you both. grt to have youhere. of start with you because you sold the most expensive house in miami ever recently. take a lookt these pictures. it is a beautiful mansion that

went for $47 million from originally priced at 60 million command to bring it down to 52 and finally 47. for our viewers out there, maybe they're trying to sell and having o reprice. what is your advice? >>ctually, it was originally priced at 52. because of all of the traffic we raise it to 60 in and reduced it back. that is where we get to our fil price. gerri: this is considered a big success. what did you tell the sellers about ving theprice around? with a happy with what they got how did you come to us settle on that number? >> the seller realize that this was an irreplaceable piece of property. nothing like it in th market as well as they knew there was nothing coming to market in the next olivier's that can compare to this. gerri: especially a property is and what you bring to the market that none else does. to you on the west coast. and now you do business all over

the country. talk tome about what you're seeing. how is i different than anywhere else. housing prices stable, rising? >> whave been exeriencing some really great news recently here on the west coast, particular in some seattle. as a matter of fact, realtor dot com posted the third quarter top-10 turnaround markets and e country, and nine of them are on the west coast. seattle is number four. and coincidentally, seattle is the only city on that list that did not get absolutely slammed during the housing downturn, like california, nevada, arizona so we actually in october experienced a 16% year-over-year price increase which is the highest price increase tt we have had for median single-family homes. gerri: that's good news. one of the selling tips. why don't you give us a buying ti.

out there, lookking for property trying to analyze the marketplace. how do you do it? what is the key to uerstanding what's going on? well, numr one, you have to understand what is going on in your lal market. here in seattle, we are experiencing really low inventory. there is not a lot of really great homes for sale. as a result, we are experiencing bidding wars, multiple offers situations, and so we're having to coach buyers on really jumping on that home that they like, coming to the table with a really song offe, being three qualified ahead of time and be willing to pull the trigger. gerri: not everybody is dealing with a market where its multiple bidders, bidding war. to you. in miami. i know that market has been in recovery as oing better, but t might be exactly where you wanted to be. what do you do when you have a property you're trying tsell up there and position just the

right way to make sure you are appealing to the right people. dealing with a persnickety high-end crowd. >> the key to selling a property specifically fo a record price is a great program. important that they have an international presence. mo of the buyers, spcifically in the high-end echoing from reign markets. gerri: alllw buyers of the past couple of years that have been from foreign markets. we have been talking and then issue that want to bring a melon is intview which isthe fiscal cliff and what is going on with housing visa the how our ax rates could change. you sta us off. will that be a big issue where you are? what are you telling clients to back >> i reallydo think that it will be a big issue. a giant concern, the uncertainty about what will happen the tax increases. the whole idea that we will lose that cap on a long-term capital gains will drive away, particularly a lot of investors.

and they have relief as a word a lot of the foreclosure properties across thiscountry. it will push us toward a housing recovery. and so we nee those buyers in e market to help keep the stable. i think right now, a susainable reaa estate recovery is an absolute wild card. gerri: do you agree? >> well, i have se a recent uptick in the past weeks as the election of sellers looking to a try to get rid of properties before year-end. gerri: you are seeing more people coming into the market because they're worried about that taxes a going to change? >> that's correct. gerri: how likely is it that you can download a properly defend property? >> i'm good at wha i do, the fairly confident that with the facthat the market has some many buyers that are waiting to purchase these trophy properties that there is an opportunity to possibly another property. gerri: you think you can match them up, but that is a high-level task. clearly, even people at the high-end are concerned about what is going on the taxes right

now. >> that's correct. gerri: what are you advising people who are worried about this? tell people to unload property, by now? what is your basic device? well, i think it is an incredible time to buy regardless. r sellers it is a very different story if they can sell, equity in the property, i strongly encourage them to sell and to sell now so that they don't deal with the long term tax implications. however, we have a major negative equity problem in this country. all other people need that forward momentum so that they can get out from under their mortgages. gerri: well put. i told you they were a white house panel. thank you for coming in tonight. appreciate it. good job. coming up, what you need to know if y're thinking of flipping house, and the perfect getaway, but sick of hotels. why now may be he best time to buy a second down, vacation home . coming up next. 4g lte is the fastest.

so, which supeast 4g lte service would yochoo, based on this chart ? don't rush into it, i'm not looking for the fastest answer. obviously verizon. okay, i have a different chart. going that way, does that make a difference ? look at verizon. it's so much more than the other ones. so what if we just changed the format altogether ? isn't that the exact same thing ? it's pretty clear. still sticking with verizon. verizon. more 4g lte coverage an all other networks combined. gerri: wn the housing market took a dive, struggling homeowners spent vacations to cut costs. the market is recovering in some opponent -- homeowners are wondering if they should buy

that vacation home. joining me now, avacation rental industry expert and author of the book, how to read vacation properties. good to see you again. talking about him a first of all, is now a good time to buy? a lot of people are asking. they know it is all about. it can be all over the place. is it to or leave early? >> well, i think it's actually a pretty good time to buy. probably the time that we will look bck can't in a few years and say, did not buy bac in 2012. now e prices are going up. last yer the pris dcrase 19% of the previous year. significantly. so -- gerri: wait. 19 percent in a year? do not overseeing in the primary home market, not that volatile. prices don't move that fast. >> well, i just think we kind of

hit the bottom, in my opinion. that is when the bulk of the foreclosures finally, you know, hit the market. a lot of foreclosures were held up for a long time because it took a long te for the process to go through. now we are seeing the inventory decrease. we are seeing the prices start to increase a little bit. they aren't going up significantly at the mall but they are definitely starting to ease of. gerri: ties year than i expected. tell me about the market. identify se of them. we feel like we have the floor anthe only directi is of. gerri: you know, there seems to be pockets of different states wherthe floor is there. you know, i could not make a broad statement and say florida's in the floor, but i do believe the gulf coast has. as you move a little bit further south, you know, the market is still a little ollow tile in south florida, but in the north

we portion of florida that is definitely getting to be a little bit more sable. and it tnessee is still a little unstable. you know, there are great reclosures. prices are down. a great time to buy. going out west, lot of the markets out there are depressed because they kind of follow the housing market with a little bit of a lag. of course, once the primary housing market increases in the condary home market we will increase. gerri: you are anxpert because you own a l of second homes, written about the market extensively. what kinds of factors, because you have done this repeatedly, what kind of factors should individuals who are trying to do is committee for the first time be thinking about? >> well, the first thing you haveo think about is where you'll buy it. i recommend buying close to home, within the never coortable driving distance for you is because it makeit much more manageable.

the second thing you have to worry about is how you pay for it. in this environment motgage rates are very difficult to get a mortgage these days for a second home. for instnce, went to go by to properties last year, and i have really get credit in pretty good net worth. really difficult to obtain mortgages. i endeup paying cash for both of the properties. and 42 percent of the properties sold last year were paid for with cash in the second home market. so that lls you that the vast majority of buyers are coming in with cash. the people who are mortgaging, 70 percent of them but more than 20 percent down. even if you plan on gettinga mortgage, your so going to have to have a signiificant cash position to be able to buy. gerri: serious, but the beauty is that you diversified investment portfolio, not just stocks and bons. now you're in real estate.

home prices have dropped and dramatically so. and as you said, mortgage rates. it does not get any better than this. thanksor coming on. apprecie your ime. thanks for educating us on this topic. >> thank you. gerri: is still to come, house flipping his back. the housing market in recovery, a cable-tv is chock full of house flippers. we are joined next.

gerri: house slippers made on

gerri: welcome back to our using speial. great opportunity for investors and nation is recovering house market tough house flipping. that is what my next guest says. is itright for you? the host of property ladder. an expert on flipping. you know whene used to talk about this all the time. there is your book. flipping confidential. and what we used to talk about this all the time and people were excited to do this. i did n think anything about it until i saw two numbers. this yr the aerage ade $30,000 on a single house in the taken only 106 days to do it. is it all at easy? >> it's not easy, and don't be fooled. renovating property for pofit takes a lot of hard work and you need to know what you're doing. we work with clients on a regula basis. there is no one answer about how to do and what to do. you need to check your

motivation. find out why you want to do this gerri: the right motivation? what can a peron does this work for? >> inventory and interest rates and interior design urns you one, maybe you are a great cand to put houses. gerri: and thinking it sounds pretty attractive, but it does take a lot of time in the have to have a lot of specialized knowedge. what are the critical fact that you need to locate that perfect house fo flipping? >> i think it takes a team. you might fancy yourself an expert, but you need a good realtor, whatthe finances are in check out why you're doing this. tax benefits, diversify your portfolio, you want to get your interior desig y'all out? figure out why you want to do it. if you need to invest money, it's a great place. if they're is a backup plan, you could always move in. gerri: i don't want to go there. less talk about the rest.

what is the potential downside? u got me all excited. if all goes wrong, what couldi be facing? >> well, i think your stats are accurate. one hundred days is the optimum for a successful flip, facing the potential of long carrng cost. you don't want to flip the house, but a ton of money into , get emotionally attached t it and not have itself. vrbiehl, a vacation rental, keep it as a second hom, move your mother-in-law and so she does not ruin your hard work. holding power to keep feeding the beast. you eed to look good options. gerri: step one, two, three. how do i get started? >> find a good realtor or bcome one yourself. did your finger on the pulse of your local real-este market. there is opportunity evrywhere, the stick to your own backyard. if you're going to spend profit on gas or flights commuting to me you're sting mone. gerri: that smart. anything special about the marketplace right now that

people need to know about? >> i think it is always there. the opportunity is there. now bat houses. look for a really good house under the srutiny of inspection so that you now what you are buying. one of the steps going to be? what is the budget really going to be? gerri: well, if i did do that probably would. >> it has to be five because there are sudden tears. gerri: appreciate your time. well, back with a vengeance, but the best places to do this? the answer is tonight's top five. nuer five, omaha, nebrask house slippers made more than

$71,000 in profits last year. the volume more than dobled. number four, washington d.c. demand for housesis rising leading to nearly two don towns flipped in 2012. oxnard, california. one in every two homes is in foreclosure making them ripe for house flipping. lake ha a sues city. i hope i pronounced that right. gross profits topped $87,000. imagine that. the number one city to the clubhouse and, right here, new york city. unbelievable. if you can afford to m house flippers are making profits of more than $118,000. a boy, did they have to have a lot of skin in the game. we will be right back with "2 cents more." stay with us. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person,

with dedicated support teams at over 500 branches natioide. so when you call or visit, you can ask for name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven d dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. ll now and find out about an aarp medicare supplement insurance plan, insureby unitedhealthcare insurance company. li all standardized medicare supplement plans, it helps pick up some of what medicare doesn't pay.

and could save you thousands in out-of-pocket costs. to me, relationships matter. i've been with my doctor for 12 years. now i know i'll be able to stick with him. [ male announcer ] with these types of plans, you'll be able to vit any doctor or spital that accepts medicare patients. plus, there are no networks, and you never need a referral to see a specialist. so don't wait. ca now and request this free decision guide to help you better understand medicare... and which aarp medicare supplemenplan might be best for you. there's a wide range to choose from. and there's so much more to see. so we found a plan that can travel with us. anywhere in the country. [ male announcer ] join the millions of people who have aeady enrolled in t only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. remember,

all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you thousands a year in out-of-pocket costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now -- and down the road. i have a lifetime of experience. so i know how important that is.

gerri: finally, housing mabe the silver lining in this is ecy has been looking for. true, another recession or the removal of major housing tax breaks could delay or postpone this recovery. the potential it is pretty awesome. that does not mean easy. if i learned anything this hour, and i've written two bookk on the topic and i learned things, getting a good deal requires doing homework and being unafraid to peel back the layers and investigate. you need a strong stomach to negotiate, but the payouts can be big. the secret to investing in any market is buying right, get in at the price that is opportunistic and that is just the opportunity that's today's rket offers. my guess is several years from now many of us will be scratching our heads and wondering why we didn't get into the housing market whewe had the opportunity. if i can leave you with one number